Judge Kelly reserves judgment in interesting NAMA case

We’ve known about NAMA’s pursuit of Dublin businessman and pub-owner David Cullen for some months. There have been at least two preliminary hearings in the High Court on NAMA’s application for a €29m judgment against the businessman whose loans transferred to the Agency. David is now resident in Notting Hill in London and is pursuing a bankruptcy application there, though it should be noted that he has not yet been declared bankrupt.

Yesterday, the matter returned to the High Court, presumably the Commercial Court division after the case was transferred there in January 2013, where it seems that David advanced two arguments which you might have thought were pretty flimsy but which the redoubtable Mr Justice Peter Kelly thought sufficiently arguable that he has reserved judgment in the case. Previously, he was quite dismissive of David Cullen, deploying his sardonic style when he told him just because David had “gone off to live in England” that did not mean the court had no jurisdiction to deal with the NAMA application.

But yesterday, David through his barrister, Martin Hayden SC, argued that (1) National Asset Loan Management Limited was not the correct plaintiff because David’s loans had been transferred to NAMA, not its subsidiaries and (2) that David’s loans were not eligible loans for acquisition by NAMA.

I would have expected Judge Kelly to send David off with a flea in his ear, but no, judgment has been reserve, no doubt, much to NAMA’s chagrin.

If Judge Kelly holds that David has raised arguable defences to NAMA’s claim for judgment, then that doesn’t of course mean that David will win during a full hearing, but it does raise doubts. And given that NAMA has pursued most of its claims in the guise of National Asset Loan Management Limited, this could prove costly for NAMA if the Judge were to eventally hold that NAMA has to be the plaintiff, not one of its group companies. The Irish Times report doesn’t elaborate on the second defence about the “eligibility” so that too may be problematic for NAMA in future.

A case to keep an eye on, though of course, Judge Kelly may ultimately dismiss both defences.

UPDATE: 22nd March, 2013. RTE reports that NAMA has finally obtained a judgment of €29m against David Cullen, as Judge Peter Kelly rejected the arguments put forward by the publican and businessman who is now resident in Notting Hill in London. The Judge refused to place a stay on the judgment and NAMA had pressed for the judgment now in advance of a UK bankruptcy hearing on 9th April 2013. Judge Kelly rejected the defence that the loans in question were not “eligible” loans under the definition in the NAMA Act, and it seems the Judge also dismissed the defence that the action was taken by a NAMA operating unit, and not NAMA itself.

UPDATE: 5th April, 2013. The judgment in the case is now available. Judge Kelly refrains from deploying what can be an acerbic wit in rubbishing David Cullen’s claims. The closest he comes to it is when he states “indeed, it is interesting to note that the defendant’s complaint concerning the plaintiff’s alleged failure to facilitate a proposal for the refinancing or redeeming of the facilities was first made by him at the same time as he was commencing bankruptcy proceedings in the United Kingdom.” Judge Kelly simply and methodically deals with all of the advanced defences and ultimately dismisses them and grants judgment to NAMA for €29,129,405.90. Peter Malbasha, an asset recovery manager from NAMA features in the case and appears to acquit himself quite well in discharging his duties.

5 Responses

@Will, do you now. In the two previous hearings Judge Kelly made a decision on the spot, and on the face of it, he was faced with two simple defences here, but chose to wait before making his decision.

Actually, it’s more a case of knowing than thinking. Kelly reserves judgments all the time, just like every other judge in the High Court, in even the most seemingly clear cut cases. It appears from the Court Services website that it’s not even the first time Kelly has reserved a judgment in this case. It’s really not that big a deal. The two issues raised, while summarised very neatly by you, are far from “simple” in the sense that you suggest (and such matters can often appear “simple” to the layperson), given that David Cullen has filed three affidavits already in the matter. The threshold to be cleared by a defendant in setting out an arguable defence when trying to avoid summary judgment is desperately low. Sometimes an ear-flea needs to be carefully crafted.

Or who knows, maybe David Cullen HAS set an arguable defence across those three affidavits! Like I said, it’s an astonishingly low threshold, one of many factors which contributes to this country’s ranking as only 63rd in the world for enforcement of contracts.